Selling, general, and
administrative expenses decreased $1.3 million in the third quarter of
fiscal year 2009 to $9.9 million, or 21.6% of net sales, from
$11.2 million, or 22.3% of net sales, for the same quarter of the prior
fiscal year. In the first nine months of fiscal year 2009, selling, general and
administrative expenses increased by $10.6 million to $33.1 million,
or 23.3% of net sales, from $22.6 million, or 21.9% of net sales. Selling,
general and administrative expenses associated with our two electronic
chemicals segments were approximately $6.2 million and $20.3 million
for the third quarter and first nine months of fiscal year 2009, respectively,
and $7.0 million for the third quarter of fiscal year 2008. Although we
discontinued transitional services with Air Products and Chemicals, Inc.
at the end of September 2008, we incurred substantial costs for
transitional services until then, along with fees to consultants assisting in
the integration of the business. Those fees were approximately $434,000 for the
first quarter of fiscal year 2009. We purchased transitional services from Air
Products in the first two months of the first quarter of fiscal year 2009,
while at the same time we had built and staffed our post-transition
infrastructure so we could complete training and testing. We believe that the
redundant infrastructure added approximately $600,000 of additional expense in
the first nine months of fiscal year 2009. As part of our effort to reduce
costs and inventory, in the third quarter we temporarily curtailed production
at our Milan facility. Although that effort had the desired cost-reducing
effect, we expensed in the third quarter approximately $655,000 of non-variable
manufacturing costs that would normally have been absorbed as part of the cost
of inventory.

Outside of electronic
chemicals, selling, general and administrative expense was flat in the third
quarter and in the first nine months of fiscal year 2009 as compared with the
prior year periods. Although we incurred
greater expenses over the first nine months of fiscal year 2009 to expand our
infrastructure supporting the electronic chemicals business, those expenses
have been offset by reductions in other areas such as in warehouse costs and
the completion of our amortization of certain wood treating intangible assets.

Selling, general, and
administrative expenses increased $4.1 million in the second quarter of
fiscal year 2009 to $11.2 million, or 25.4% of net sales, from
$7.1 million, or 22.7% of net sales, for the same quarter of the prior
fiscal year. In the first six months of fiscal year 2009, selling, general and
administrative expenses increased by $11.9 million to $23.2 million,
or 24.1% of net sales, from $11.4 million, or 21.5% of net sales. Selling,
general and administrative expenses associated with our two electronic
chemicals segments were approximately $6.5 million in the second quarter,
and were approximately $14.1 million for the first six months of fiscal
year 2009. Although we discontinued transitional services with Air Products at
the end of September 2008, we incurred substantial costs for transitional
services until then, along with fees to consultants assisting in the
integration of the business. Those fees were approximately $434,000 for the
first quarter of fiscal year 2009. We purchased transitional services from Air
Products in the first two months of the first quarter of fiscal year 2009,
while at the same time we had built and staffed our post-transition infrastructure
so we could complete training and testing. We believe that the redundant infrastructure
added approximately $600,000 in additional expense in the first six months
period.

14

Outside of electronic
chemicals, selling, general and administrative expense was flat in the second
quarter and in the first six months of fiscal year 2009 as compared with the
prior year periods. Although we incurred
greater expenses over the first six months of fiscal year 2009 to expand our
infrastructure supporting the electronic chemicals business, those expenses
have been offset by reductions in other areas such as in warehouse costs and
the completion of our amortization of certain wood treating intangible assets.

Selling,
general, and administrative expenses increased $7.8 million in the first
quarter of fiscal year 2009 to $12.0 million, or 23.0% of net sales, from
$4.2 million, or 19.8% of net sales for the same quarter of the prior
fiscal year. Selling, general and administrative expenses associated with our
electronic chemicals business were approximately $7.6 million in the first
quarter. Although we discontinued transitional services with Air Products at
the end of September 2008, we incurred substantial costs for transitional
services until then, along with approximately $434,000 in fees to consultants
assisting in the integration of the business. We purchased transitional
services from Air Products in the first two months of the first quarter of fiscal
year 2009, while at the same time we had built and staffed our post-transition
system so we could complete training and testing. We believe that the redundant
systems added approximately $600,000 in additional expense in the first
quarter.

Outside
of electronic chemicals, selling, general and administrative expense was flat
in the first quarter as compared with the prior year period.

Selling, General and Administrative
Expenses These
expenses include selling expenses, product storage and handling costs and the
cost (primarily common carrier freight) of distributing products to the Companys
customers. Corporate headquarters expenses, amortization of intangible assets
and environmental regulatory support expenses are also included.

Selling, General and AdministrativeExpenses Theseexpenses include selling expenses, product storage and handling costs and thecost (primarily common carrier freight) of distributing products to the Companyscustomers. Corporate headquarters expenses, amortization of intangible assetsand environmental regulatory support expenses are also included.

Selling, general, and
administrative expenses increased $7.3 million in the third quarter of
fiscal year 2008 to $11.2 million, or 22.3% of net revenue, from
$3.9 million, or 14.6% of net revenue for the same quarter of the prior
fiscal year. For the nine month period,
those expenses increased $11.3 million to $22.6 million, or 21.9% of
net revenue. Selling, general and
administrative expenses associated with our electronic chemicals business were
approximately $7.0 million in the third quarter and $9.5 million since
December 31, 2007. Those expenses
included charges for transitional services provided by Air Products and
approximately $225,000 in the last four months for fees to consultants
assisting in the integration of the business.
Although approximately 60% of transitional services are costs from third
parties allocated to us by Air Products, about $1.6 million was allocated
to us in the third quarter for Air Products internal costs, including
corporate overhead. We estimate that the transition services provided by Air
Products costs us approximately $175,000 per month more than it will cost us to
provide those functions internally after the conclusion of transition. We
believe that the transitional services will be largely completed by the end of
August 2008. After the transition
has been completed, we expect to see savings in selling, general and
administrative expenses of approximately $1.0 in fiscal year 2009 over this
year on a comparable period basis.
Components of those savings are expected to include reduced costs for
accounting and information technology systems, as well as a reduction in supply
chain costs.

Outside of electronic
chemicals, selling, general and administrative expenses increased in the third
quarter over the prior year period by about $337,000, and increased
$1.5 million for the nine months.
We had increases for the nine months in supply chain costs of
approximately $394,000, increased employee, marketing and advertising expenses
for animal health of approximately $498,000, and other professional services,
including increased accounting and legal services, of approximately $704,000. Supply
chain increases consisted of property tax on inventory, rail car maintenance
and creosote storage facility costs. Supply
chain expenses included in selling, general and administrative expense were $989,000
in the third quarter of fiscal year 2008, as compared to $882,000 in fiscal
year 2007, and $2.7 million in the first nine months of this fiscal year, as
compared to $2.3 million in the prior fiscal year. The increase in both the quarter and the nine
months was primarily due to increased sales. Accounting and legal expenses increased
because of higher auditing costs, Sarbanes Oxley compliance costs and higher
litigation expense.

Selling, general, and
administrative expenses increased $3.1 million in the second quarter of
fiscal year 2008 to $7.1 million, or 22.7% of net revenue, from $4.1 million,
or 21.4% of net revenue for the same quarter of the prior fiscal year. For the six month comparison, those expenses
increased $4.0 million to $11.4 million, or 21.5% of net revenue. Selling, general and administrative expenses
associated with the electronic chemicals business were approximately
$2.5 million, including charges for transitional services provided by Air
Products and approximately $185,000 in the first quarter on fees to consultants
assisting in the integration of the HPPC business. After the transition has been completed, we
believe that we will save approximately $175,000 per month on items included in
the transitional services provided by Air Products. Selling, general and administrative expenses
increased elsewhere in the second quarter over the prior year period in supply
chain costs of approximately $280,000, increased employee, marketing and
advertising expense for animal health of approximately $430,000, and increased
accounting and legal services of approximately $350,000. Supply chain increases consisted of

Selling,
general, and administrative expenses increased $953,000 in the first quarter of
fiscal year 2008 to $4.2 million, or 19.8% of net revenue, from
$3.3 million, or 19.4% of net revenue for the same quarter of the prior
fiscal year. Selling, general and
administrative expenses saw increases in the first quarter over the prior year
period in supply chain costs of approximately $218,000, increased employee
costs of approximately $271,000, and increased accounting and legal services of
approximately $282,000. Supply chain
increases consisted of property tax on inventory, rail car maintenance and
creosote storage facility costs. We also
incurred expense of approximately $59,000 in the first quarter related to our
pending acquisition of a high purity process chemicals business.

Selling, General and Administrative
Expenses These
expenses include selling expenses, product storage and handling costs and the
cost (primarily common carrier freight) of distributing products to the Companys
customers. Corporate headquarters expenses, amortization of intangible assets
and environmental regulatory support expenses are also included.

Selling, general, and administrative expenses increased $536,000 in the
third quarter of fiscal year 2007 to $4.2 million, or 14.9% of net
revenue, from $3.6 million, or 17.3% of net revenue, for the same quarter
of the prior fiscal year. Selling,
general and administrative expenses increased $443,000 in the first nine months
of fiscal year 2007 to $12.1 million, or 18.6% of net revenue, from
$11.6 million, or 22.8% of net revenue, in fiscal year 2006. Distribution expense declined $66,000 in the
third quarter of fiscal year 2007 and $1.7 million in the first nine
months of fiscal year 2007 as compared to the prior year, because we shifted to
FOB pricing on certain of our products. However, in the first nine months of
fiscal 2007, costs related to the animal health product lines acquired in
February 2006 increased selling, general and administrative expenses by
$1.6 million. Product registration
expenses related to agricultural chemicals were also up $215,000 in the first
nine months compared to the prior year due to increased regulatory activity.

Selling, General and
Administrative Expenses. These expenses include selling expenses,
product storage and handling costs and the cost (primarily common carrier
freight) of distributing products to the Companys customers. Corporate
headquarters expenses, amortization of intangible assets and environmental
regulatory support expenses are also included.

Selling, General and
Administrative Expenses. These expenses include selling expenses,
product storage and handling costs and the cost (primarily common carrier
freight) of distributing products to the Companys customers. Corporate
headquarters expenses, amortization of intangible assets and environmental
regulatory support expenses are also included.

Selling, General and Administrative Expenses These expenses include selling expenses,
product storage and handling costs and the cost (primarily common carrier
freight) of distributing products to the Companys customers. Corporate
headquarters expenses, amortization of intangible assets and environmental
regulatory support expenses are also included.

Selling, general, and administrative expenses increased $777,000 in the third quarter of fiscal year 2006 to $3.6 million, or 17.3% of net revenue, from
$2.9 million, or 18.6% of net revenue, for the same quarter of the prior fiscal year. Over the first nine months of fiscal year 2006, these expenses increased by $2.4 million to
$11.6 million from $9.2 million in the same period of the prior fiscal year, an increase of 26.1%. Selling, general and administrative expenses were 22.8% of net revenues in the first
nine months of fiscal year 2006 and 22.2% of net revenue in that period in the prior fiscal year. Although distribution expense declined in the third quarter of fiscal year 2006 as compared to the
prior year because we shifted to pricing at our plant from pricing on a delivered basis for certain of our products, distribution expense increased over the first nine months of fiscal year 2006 based
upon greater penta volume. We also experienced increased expense for amortization of penta intangibles acquired in fiscal year 2005, and for supply chain disruptions caused by Hurricanes Katrina and
Rita. For the first nine months of fiscal year 2006, approximately $160,000 of the increase was due to increased penta distribution expenses and approximately $1.3 million was due to increased
amortization expense. We temporarily lost the use of our creosote terminal near New Orleans due to Hurricane Katrina and incurred additional expense for a substitute interim terminal. We also began
amortizing previously issued options and deducting for shares issued to directors and employees, incurring additional expense in fiscal year 2006 of approximately $305,000 over the prior fiscal year.

As a percentage of net revenue, selling, general,
and administrative expenses increased slightly in the second quarter of fiscal
2006 to 27.0% from 26.7% for the same quarter of the prior fiscal year. Selling,
general and administrative expenses for the second quarter of fiscal 2006 were
approximately $870 thousand (26.2%) higher than in that quarter in the
prior fiscal year. Over the first six months, these expenses increased
$1.6 million (25.7%) over the prior year. In both the second quarter and
for the full six months of fiscal 2006, the increase in expense was primarily
attributable to penta distribution expense increases on greater volume,
increased amortization expense for penta intangibles acquired in fiscal 2005,
and supply chain disruptions caused by hurricanes Katrina and Rita. For the
first six months of fiscal 2006, about $325 thousand of the increase was
due to increased penta distribution expenses, and $800 thousand was for
increased amortization expense. We temporarily lost the use of our creosote
terminal near New Orleans due to hurricane Katrina, and incurred additional
expense for a substitute interim terminal. We also began amortizing previously
issued options and deducting for shares issued to directors, incurring
additional expense in fiscal 2006 of approximately $250 thousand over the
prior year.

As
a percentage of net revenue, selling, general, and administrative expenses
increased in the first quarter of this fiscal year to 26.3% from 22.2% for the
same quarter of the prior fiscal year.
Selling, general and administrative expenses for the first quarter of fiscal
2006 were approximately $761 thousand (25.2%) higher than in that quarter
in the prior fiscal year. About
$200 thousand of the increase was due to increased penta distribution
expenses on greater volume, and about $400 thousand of the increase was
for amortization expense for penta intangibles acquired in fiscal 2005. We temporarily lost the use of our creosote
terminal near New Orleans due to Hurricane Katrina, and incurred additional
expense for a substitute interim terminal.

Selling, General and Administrative
Expenses  These expenses include selling expenses, product
storage and handling costs and the cost (primarily common carrier freight) of
distributing products to the Companys customers. Corporate headquarters expenses,
amortization of intangible assets and environmental regulatory support expenses
are also included.

As a percentage of net revenue, selling, general, and administrative
expenses decreased in the third quarter of this fiscal year to 18.6% from 20.4%
for the third quarter of the prior fiscal year.
Those expenses also decreased as a percentage of net revenue for the
nine-month comparison, declining to 22.2% this fiscal year from 24.5% for the
last fiscal year.

Selling, general and administrative expenses for the third quarter of
fiscal 2005 were approximately $329 thousand (13.0%) higher than in the
same quarter of the prior fiscal year.
For the nine-month period, the increase over the prior year was
$2.0 million (28.3%). About
$270 thousand of the increase in the third quarter, and $1.3 million
over the first nine months, was from higher selling and distribution expense
due to greater creosote and penta sales volume.
Performance based incentive compensation and the addition of a chief
operating officer have increased executive expenses relative to the prior year
periods, approximately $131 thousand for the third quarter comparison and
$411 thousand for the first nine months.
Amortization of intangibles associated with our fiscal 2004 acquisitions
also contributed approximately $26 thousand to the increase in the third
quarter over the prior year, and $181 thousand of the increase for nine months
comparison.

As a percentage of net revenue, selling, general, and administrative
expenses decreased in the second quarter of this fiscal year to 26.7% from 30.1%
for the second quarter of the prior fiscal year. Those expenses also decreased as a percentage
of net revenue for the six-month comparison, declining to 24.4% this fiscal
year from 27.5% for the last fiscal year.
Selling, general and administrative expenses for the second quarter of
fiscal 2005 were approximately $760 thousand (29.6%) higher than in the
same quarter of the prior fiscal year. For
the six-month period, the increase over the prior year was $1.7 million
(36.7%). Most of the increase was from
higher selling and distribution expense due to greater creosote and penta sales
volume, and higher regulatory costs for each of our products. The addition of a chief operating officer and
a new product manager increased executive compensation relative to the prior
year. Amortization of intangibles
associated with our fiscal 2004 acquisitions also contributed to the increase
over the prior year.